The British Retail Consortium is calling on politicians to tackle the cost of card fees in the UK, as new research reveals that four in every five pounds spent in UK shops is now made by plastic.
The BRC's latest annual Payments Survey shows that Over 80% of retail spending now uses debit or credit cards. The pandemic and digital shift mean that cash use now accounts for just 15% of total spending in retail (down from 20% in 2019), though it still accounts for 30% of individual transactions.
The overwhelming trend towards card payments in recent years has meant retailers incurred costs of £1.3 billion from card fees in 2020, says the BRC. Debit cards, which accounted for over half of all transactions (54%) for the first time, have seen transaction fees rise by 22% (to 7.2 pence per transaction).
"Amidst a backdrop of mounting costs from Covid, Brexit, global supply chain disruption and rising commodity prices, these excessive card fees add further cost pressures to retailers," the retailer lobby group states. "Equivalent to £46 per household per year, these additional costs can translate into higher prices for consumers."
The BRC says that last year, the UK Supreme Court ruled that card firm interchange fees were unlawful, "yet the UK’s Payment Systems Regulator five-year strategy delivers nothing to resolve this issue".
Andrew Cregan, payments policy advisor, British Retail Consortium comments: “Despite the general movement to card payments, retailers are being punished through the soaring cost of accepting such payments. Parliament needs to urgently intervene in this anti-competitive behaviour by regulating card scheme fees and abolishing interchange fees, both of which ultimately hurt consumers. Card firms are abusing their dominant market position, and this must come to an end.”